Acting Comptroller of the Currency Michael Hsu identified three key policy issues critical to understanding and shaping the stablecoin system: stability, interoperability, and separability.
Hsu Remarks: In a speech on stablecoin architecture, Hsu said:
-
A regulatory approach comparable to bank regulation would be more effective than regulating stablecoins like money market funds, though it would be “overly burdensome” for companies that only issue coins and hold reserves for redemption.
-
Interoperability within stablecoins on multiple chains and across stablecoins is likely to become a bigger issue as they come to be used for payments, though the industry is not paying enough attention to this challenge.
-
Blockchain-based activities should be separated from insured depository institution subsidiaries to avoid intraday liquidity risks.
FSOC Meeting: Also Friday, the Financial Stability Oversight Council met to hear from agency staff on commodity market developments and Treasury staff on preliminary work to execute the president’s executive order on digital assets.
Yellen Speech: Friday’s events followed a speech from Treasury Secretary Janet Yellen on the need for a coordinated policy response to digital assets that reflected many of ICBA’s core crypto priorities.
More: Recent ICBA blog posts provide the latest on stablecoin market developments and how Washington is responding. ICBA also offers a summary of the president EO on digital assets.
